Reading 60: An Introduction to Security Valuation: Part II expected, required, return, growth, black

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26.irm has an expected dividend payout ratio of 50%, a required rate of return of 12% and a constant growth rate of 6%. If earnings for the next year are expected to be $4.50, the value of the stock today is closest to:

A)   $33.50

B)   $37.50

C)   $35.25

D)   $39.75

27.irm has an expected dividend payout ratio of 48 percent and an expected future growth rate of 8 percent. What should the firm's price to earnings ratio (P/E) be if the required rate of return on stocks of this type is 14 percent and what is the retention ratio of the firm?

       P/E ratio    Retention ratio

A)              6.5      48%

B)              8.0       52%

C)              8.0       48%

D)              6.5      52%

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答案和详解如下：

26.irm has an expected dividend payout ratio of 50%, a required rate of return of 12% and a constant growth rate of 6%. If earnings for the next year are expected to be $4.50, the value of the stock today is closest to:

A)   $33.50

B)   $37.50

C)   $35.25

D)   $39.75

The correct answer was B)

Expected dividend = $4.50 × 0.50 = $2.25

Value today = $2.25 / (0.12 - 0.06) = $37.50

 

27.irm has an expected dividend payout ratio of 48 percent and an expected future growth rate of 8 percent. What should the firm's price to earnings ratio (P/E) be if the required rate of return on stocks of this type is 14 percent and what is the retention ratio of the firm?

       P/E ratio    Retention ratio

A)              6.5      48%

B)              8.0       52%

C)              8.0       48%

D)              6.5      52%

The correct answer was B)

P/E = (dividend payout ratio)/(k - g)

P/E = 0.48/(0.14 - 0.08) = 8

The retention ratio = (1 - dividend payout) = (1 - 0.48) = 52%